Chase Bank responded to viral social media videos depicting people exploiting an apparent flaw in the bank’s system, stating that those customers were likely committing fraud. Over Labor Day weekend, videos surfaced on TikTok and other social media platforms showing individuals depositing fraudulent checks for large sums of money at Chase Bank ATMs. They would then withdraw a significant amount, believing they had found a glitch that allowed them to obtain free money.
However, a spokesperson for Chase Bank clarified that these individuals were likely engaging in fraudulent activity and that the issue has been resolved. The bank cautioned customers against replicating what they had seen online.
“We are aware of this incident, and it has been addressed,” a Chase spokesperson informed The Epoch Times via email on Tuesday.
“Regardless of what you see online, depositing a fraudulent check and withdrawing the funds from your account is fraud, plain and simple,” the spokesperson emphasized.
The bank did not comment on whether it is investigating the videos or involving law enforcement. The number of Chase customers attempting such withdrawals remains unknown.
“Check kiting. It’s called check kiting. And it’s been around since the invention of … checks,” noted Cornell University law professor Dan Awrey in response to the videos depicting the alleged fraudulent activity.
Check kiting, classified as a form of check fraud, involves attempting to cover a bad check from one bank account to another, according to the Cornell Law School. Individuals with multiple accounts can exploit this practice since it takes several days to process checks.
“Banks typically resolve issues of check swapping without prosecuting the kiters. However, if the scheme involves payment to a third party, banks must pursue prosecution,” as stated in a Department of Justice research paper.
Advice From Finance Professionals
Financial educator Jim Wang, operating the website WalletHacks.com, cautioned that individuals trying to defraud the bank may have their accounts frozen.
“The people attempting this found themselves facing substantial negative balances in their accounts,” Wang remarked on Instagram. “Bank errors in your favor rarely work out in your favor. In this case of the ‘glitch,’ it was simply check fraud.”
Wang recommended informing the bank immediately if a large sum of money unexpectedly appears in a person’s account.
“Just because money appears in your account, doesn’t mean it’s rightfully yours,” Wang advised. “If you spend it and are required to repay, you’ll need to find a way to return the funds.”
Check fraud, under certain circumstances, can constitute a felony offense, as per fraud protection company SQN Banking Systems. If the fraudulent amount exceeds $500, it is more likely to be classified as a felony rather than a misdemeanor.
According to SQN, misdemeanor charges for fraud can result in fines and up to a year in jail. Felony fraud charges could lead to several years in prison and substantial fines, depending on the state and the nature of the crime.
Victims like Chase Bank can pursue civil compensation from the individual involved in the fraud, with the potential amount varying from state to state, SQN added.
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